George W. Bush got the world's attention by drawing a line after 9/11. "You're either with us or against us," Bush warned when it came to radical Islamic terrorism. It provided a clarifying moment in American foreign policy, and carried enough of a military and economic threat that forced cooperation from unlikely sources.
This morning, Donald Trump played the same card Bush did, and against the same type of threat. Trump didn't use precisely the same formulation, but the point comes through clearly. Anyone doing business with Iran will have to choose between the IRGC and having access to Western financial systems and assets:
No one has given the Islamic Republic of Iran a greater opportunity to make a Deal than me. TRAGICALLY, for them, they have failed to take it. Therefore, today, I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY! This will be Economic Warfare and Isolation on an unprecedented scale. Their navy is gone, their air force is destroyed, their military factories are now rubble, their currency is worthless, and their country is hanging by a thread. Today, I am also announcing that ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences. Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — It all needs to stop NOW. You know who you are. This will be an ECONOMIC D-DAY, and we need all of our Allies to stand with the United States of America to isolate, and defeat, the Iran threat. These maniacs are on the ropes, and these HISTORIC MEASURES will cripple them and their ability to project terror worldwide. IRAN WILL NEVER HAVE A NUCLEAR WEAPON. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. President DONALD J. TRUMP
"You know who you are." Well, we all know who they are. They are China, Russia, Oman, Qatar, and most importantly for Iran, the UAE – whose emirates probably didn't need a threat from Trump to cut off the Iranians after the IRGC's attacks on their infrastructure. The UAE has long been the IRGC's financial proxy, helping it avoid sanctions largely driven by the US and adopted to some degree by the EU as well.
China has deep investments in the US market and will likely avoid a direct confrontation with Trump that could lead to a disruption of their business. Russia doesn't do much business with the West at this point, so Vladimir Putin will shrug at the threat. The real pressure point is Dubai, and the Wall Street Journal reports that it may take some arm-twisting despite the emirates' anger at the IRGC:
The United Arab Emirates said late Tuesday that it has suspended financial and economic transactions with Iran, potentially threatening Tehran’s access to a major source of imports and a financial back door to the world.
The move follows weeks of Trump administration cajoling of the U.A.E. to crack down on Iranian financial networks operating in the country, telling Emirati officials that targeting money flows linked to Iran’s Islamic Revolutionary Guard Corps could have a greater impact on Tehran than the U.S. naval blockade of Iranian ports, according to people familiar with the matter. ...
If implemented broadly, the U.A.E. step could significantly curb Tehran’s access to foreign currency and global trade networks as the Iranian economy buckles under soaring inflation, sanctions and wartime disruption. The Trump administration hopes that could increase pressure on Iran to strike a deal.
Are we still talking about a deal? Perhaps, but by this point, Trump has to recognize that the IRGC will never offer a deal in good faith. This is more about regime collapse at this point. The US can't force regime change from the air or sea, at least not directly, but a complete economic blockade may force a collapse and a popular revolt against the tyrannical and murderous regime.
That will require the UAE to join the US in this economic warfare fully. However, Dubai values its status as a financial Casablanca, and they may be more invested in playing both sides against the middle:
But severing those links will be difficult. Much of the activity is deliberately obscured. U.S. sanctions orders in recent years show that oil revenues, foreign-currency trades and payments for Iranian entities have long moved through shell companies and exchange houses in Dubai, often without an Iranian name appearing on the transaction.
Cutting off Iran would also require Emirati authorities to crack down much more aggressively on opaque financial and trading activity, which could hurt Dubai’s role as a freewheeling global hub for commerce, capital and re-exports.
Trump will have to convince the UAE that its long-term financial prospects also hinge on US protection for its shipping. Trump has one advantage in this situation that Bush lacked: a fully robust American oil production industry that exports enough to greatly influence global oil prices. The Iranian blockade and the arrest of Nicolas Maduro have cut deeply into black-market oil resources. That would normally benefit legit producers like the UAE, but it also makes their output less of a card to play against the West.
The UAE will have to play along, at least for now and at least to some nominal degree. If the emirates truly want to put an end to the risk factors that the IRGC has created for the last 47 years, they'll do so enthusiastically.
Editor’s Note: Thanks to President Trump and his administration’s bold leadership, we are once again respected on the world stage, and our enemies are being put on notice.
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